Guam's Consolidated Commission on Utilities on Tuesday approved the Guam Waterworks Authority plan to sell $270 million of bonds.
The authority anticipates the bonds will have an all-in true interest cost of 4.91%, said Miguel Bordallo, general manager of the authority.
RBC Capital Markets and Raymond James will underwrite the deal, according to a draft bond purchase agreement attached to
Orrick, Herrington & Sutcliffe is bond counsel. Montague DeRose and associates is municipal advisor.
The bonds are planned to mature from 2030 to 2055 and have an average life of 20.4 years, Bordallo told the commission.
They are expected to price on July 15, Bordallo said. The authority will seek ratings in June.
The utility's bonds are currently rated Baa2 by Moody's Ratings, A-minus by S&P Global Ratings and BBB by Fitch Ratings.
The Waterworks Authority last sold bonds in March 2024. The Series 2024A and B bonds were sold on a negotiated basis, with RBC Capital Markets as the underwriter.
The bonds are consistent with the authority's five-year financial plan and capital improvement plan, Bordallo said. They will be used for capital needs connected to water production, treatment, distribution and storage, wastewater collection and treatment, electrical monitoring and control and general plant needs.
Bordallo said the bonds should cover the authority's capital spending needs for the next two years. Rate increases already approved by Guam's public utilities commission will be adequate to support debt service on the bonds.
The projects will address a 2011 court order and a 2024 consent decree with the U.S. Environmental Protection Agency,
Bordallo said his authority was pursuing a $75 million short term financing and getting it would delay when it would next go the market to sell a bond after the July bond sale.
The Public Utilities Commission and the Guam Economic Development Authority will also have to approve the bonds before the Waterworks Authority can sell them.
The Waterworks Authority had $621 million in revenue bonds outstanding on Sept. 30 excluding what was owed in the following 12 months, according to its most recent Annual Comprehensive Financial Report. In fiscal 2024 it had $130 million in total operating revenue and improved its net position by $6 million.
